Chakraborty, Avik, 1975-
Evans, George W., 1949-
2006-10-02T21:14:10Z
2006-10-02T21:14:10Z
2006-08-28
http://hdl.handle.net/1794/3425
38 p. June 30, 2006. Revised August 28, 2006.
Under rational expectations and risk neutrality the linear projection
of exchange rate change on the forward premium has a unit
coefficient. However, empirical estimates of this coefficient are significantly
less than one and often negative. We investigate whether
replacing rational expectations by discounted least squares (or “perpetual”)
learning can explain the result. We calculate the asymptotic
bias under perpetual learning and show that there is a negative bias
that becomes strongest when the fundamentals are strongly persistent,
i.e. close to a random walk. Simulations confirm that perpetual
learning is potentially able to explain the forward premium puzzle.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2006-8
Can Perpetual Learning Explain the Forward Premium Puzzle?
Working Paper

Magud, Nicolas
Reinhart, Carmen M.
2005-12-15T16:43:25Z
2005-12-15T16:43:25Z
2005-06-02
http://hdl.handle.net/1794/1929
39 p.
The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is no unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a “success” and (iv) the empirical studies lack a common methodology—furthermore these are significantly “overweighted” by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to “standardize” the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies only in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2005-19
Capital Controls: An Evaluation
Working Paper

Magud, Nicolas
Reinhart, Carmen M.
Rogoff, Kenneth S.
2006-10-02T21:26:11Z
2006-10-02T21:26:11Z
2005-11
http://hdl.handle.net/1794/3427
45 p.
The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is no unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a "success" and (iv)
the empirical studies lack a common methodology-furthermore these are significantly "over-weighted" by a couple of country cases (Chile and Malaysia). In this paper, we attempt to
address some of these shortcomings by: being very explicit about what measures are construed
as capital controls. Also, given that success is measured so differently across studies, we sought to
"standardize" the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness
Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The
difference between them lies only in that the WCCE controls for the differentiated degree of
methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as
possible, we bring to bear the experiences of less well known episodes than those of Chile and
Malaysia. Then, using a portfolio balance approach we model the e®ects of imposing short-term
capital controls. We find that there should exist country-specific characteristics for capital controls to be effective. From these simple perspective, this rationalizes why some capital controls
were effective and some were not. We also show that the equivalence in effects of price- vs.
quantity-capital control are conditional on the level of short-term capital flows.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2006-10
Capital Controls: Myth and Reality, A Portfolio Balance Approach to Capital Controls
Working Paper

Andreoni, James
Harbaugh, William
Vesterlund, Lise
2003-08-13T19:26:05Z
2003-08-13T19:26:05Z
2002-08-20
http://hdl.handle.net/1794/83
We examine rewards and punishments in a simple proposer-responder game. The proposer first makes an offer to split a fixed-sized pie. According to the 2×2 design, the responder is or is not given a costly option of increasing or decreasing the proposer's payoff. We find substantial demands for both punishments and rewards. While rewards alone have little influence on cooperation, punishments have some. When the two are combined the effect on cooperation is dramatic, suggesting that rewards and punishments are complements in producing cooperation. Providing new insights to what motivates these demands is the surprising finding that the demands for rewards depend on the availability of punishments.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2002-1
Fairness
Public goods
Experimental economics
The Carrot or the Stick: Rewards, Punishments, and Cooperation
Working Paper

Blonigen, Bruce A. (Bruce Aloysius)
Wooster, Rossitza B. (Rossitza Bouneva), 1971-
2003-12-15T19:46:54Z
2003-12-15T19:46:54Z
2003-03
http://hdl.handle.net/1794/133
Anecdotal evidence suggests that new CEOs with foreign backgrounds direct their firms to become more international in their operations. We examine this hypothesis formally using data on U.S. S&P-500 manufacturing firms from1992 through 1997 and biographical information on CEO's birth and education locations that allow us to identify changes from U.S.- to foreign-connected CEOs. Robust to a variety of specifications, we find that a U.S. firm's switch from a U.S. to a foreign CEO leads to substantial increases in the firm's proportion of its foreign assets and foreign affiliate sales. In fact, our preferred specification indicates that foreign asset and affiliate sales proportions increase 25 and 40%, respectively, for the five years after there is CEO turnover to one with a foreign background. This is in contrast to U.S.-to-U.S. CEO switches in our sample that show no evidence of changes in a firms' foreign market participation. These large effects contrast with previous literature that finds little evidence for changes in firm performance with CEO turnover.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2003-24
International economics
Financial economics
International factor movements and international business
Multinational firms
International business
Corporate finance and governance
CEO Turnover and Foreign Market Participation
Working Paper

Gray, Jo Anna
Stone, Joe A. (Joe Allan), 1948-
Stockard, Jean
2006-03-21T14:20:14Z
2006-03-21T14:20:14Z
2006-02
http://hdl.handle.net/1794/2463
45 p.
This paper proposes and tests a simple joint explanation for i) increases in marital and nonmarital birth rates in the United States over recent decades, ii) the dramatic rise in the share of nonmarital births, and iii) the pronounced racial differences in the timing of childbearing. The explanation arises from differences across time and race in the attractiveness of marriage and opportunities for investment in human capital. For given preferences, a decline in the marriage rate necessarily causes both the marital and nonmarital birth rates to increase, with no change in the total birth rate. This model exhibits exceptional power in replicating salient features of childbearing behavior. Our results suggest that changes in marital and nonmarital birth rates, as well as in the share of nonmarital births, arose primarily from changes in marriage behavior, not from changes in fertility; and that racial differences in the timing of childbearing reflect early differences in human capital investment.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2006-01
Illegitimacy ratio
Marriage
Birth rates
Education
Welfare
Childbearing, marriage and human capital investment
Working Paper

Stockard, Jean
Gray, Jo Anna
O'Brien, Robert
Stone, Joe A. (Joe Allan), 1948-
2007-10-24T19:35:14Z
2007-10-24T19:35:14Z
2007-05
http://hdl.handle.net/1794/5132
45 p.
The authors employ a newly developed method to disentangle age, period and
cohort effects on nonmarital fertility ratios (NFR) from 1972 to 2002 for U.S. women
aged 20-44 – with a focus on three specific cohort factors: family structure, school
enrollment, and the ratio of men to women. All play significant roles in determining NFR
and vary substantially for whites and blacks. Indeed, if black women and white women
had cohort characteristics typical of the other group, age-specific NFRs for black women
would decline markedly, while those for whites would increase markedly. Hence, cohort
related variables contribute substantially to black-white differences in NFR in adulthood.
Early family structure and education are particularly crucial in the racial differences.
Most distinctively, while the impact of school enrollment on NFR is significantly
negative for whites, the impact is significantly positive for blacks, perhaps due to the
dominance of the “independence” effect.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2007-10
Fertility
Cohort
Unmarried births
Education
Family structure
Sex ratio
Cohort Effects on Nonmarital Fertility
Working Paper

Davies, Ronald B.
Ellis, Christopher J.
2003-08-12T20:34:18Z
2003-08-12T20:34:18Z
2001-06-01
http://hdl.handle.net/1794/71
Tax incentives offered to attract firms engaged in foreign direct investment are often tied to performance requirements such as domestic content restrictions. The tax competition literature has repeatedly shown that competition between municipalities for mobile firms tends to drive taxes to low levels. One would expect a comparable result for burdensome performance requirements. Despite this, the evidence suggests that while taxes have indeed been driven down, performance requirements are as popular as ever. We explain this seeming conundrum by showing that in the presence of spillovers, binding performance requirements can act as a coordination device for firms. In equilibrium, municipalities choose performance requirements which maximize joint surplus from investment. Competition between municipalities then transfers this surplus to firms via tax subsidies.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2001-4
Foreign direct investment
Tax competition
Domestic content requirements
Competition in Taxes and Performance Requirements for Foreign Direct Investment
Working Paper

Barron, John M.
Umbeck, John R., 1945-
Waddell, Glen R.
2003-12-15T20:36:58Z
2003-12-15T20:36:58Z
2003-09
http://hdl.handle.net/1794/137
39, 5 p. : ill.
The standard differentiated-product model with Nash-equilibrium price setting suggests that the density of sellers in a market can affect both a seller’s price elasticity of demand and a competitor’s reaction to a price change. Using field experiment data collected around a series of exogenously imposed price changes, we are able to demonstrate that a gasoline retailer’s price elasticity of demand is directly related to seller density, where density is measured by the number of sellers within a given geographical area. This finding appears to be one potential source for observed persistent price differences. The data also allow us to examine the reaction of rivals to exogenous price changes. Consistent with the theory, we find that competitors’ price reactions are in the same direction, with the magnitude of the competitors’ reactions being inversely related to the market’s density of sellers.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers;2003-18
Microeconomics
Industrial organization
Information and uncertainty
Market structure and pricing
Market structure, firm strategy, and market performance
Search, learning, and information
Oligopoly and other forms of market imperfection
Consumer and competitor reactions: Evidence from a retail-gasoline field experiment
Working Paper

Davies, Ronald B.
Naughton, Helen T. (Helen Tammela), 1976-
2007-02-21
2007-02-21
2006-07
http://hdl.handle.net/1794/3879
45 p.
Inefficient competition in emissions taxes creates benefits from international
cooperation. In the presence of cross-border pollution, proximate (neighboring)
countries may have greater incentives to cooperate than distant ones as illustrated by a
model of tax competition for mobile capital. Spatial econometrics is used to estimate
participation in 37 international environmental treaties. Data on 41 countries from
1980-1999 reveal evidence of increased cooperation among proximate countries.
Furthermore, the results indicate that FDI usually increases treaty participation. We
also find that both OECD and non-OECD countries respond positively to OECD
countries’ participation but the response to non-OECD countries is primarily from
similar countries. This suggests that the rich countries may lead others in setting
environmental quality.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2006-18
Environmental agreements
Foreign direct investment
Spatial econometrics
Cooperation in Environmental Policy: A Spatial Approach
Working Paper

Voorneveld, Mark
Nouweland, Anne van den
2003-08-13T18:52:42Z
2003-08-13T18:52:42Z
2001-06-01
http://hdl.handle.net/1794/78
A new class of cooperative multicriteria games is introduced which takes into account two different types of criteria: private criteria, which correspond to divisible and excludable goods, and public criteria, which in an allocation take the same value for each coalition member. The different criteria are not condensed by means of a utility function, but left in their own right. Moreover, the games considered are not single-valued, but each coalition can realize a set of vectors representing the outcomes of each of the criteria depending on several alternatives. Two core concepts are defined: the core and the dominance outcome core. The relation between the two concepts is studied and the core is axiomatized by means of consistency properties.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2001-11
Economics
Games
Public
Private
Cooperative Multicriteria Games with Public and Private Criteria; An Investigation of Core Concepts
Working Paper

Evans, George W., 1949-
Guesnerie, R.
2003-08-12T23:31:03Z
2003-08-12T23:31:03Z
2001-05-15
http://hdl.handle.net/1794/74
We investigate local strong rationality (LSR) in a one step forward looking univariate model with memory one. Eductive arguments are used to determine when common knowledge (CK) that the solution is near some perfect foresight path is sufficient to trigger complete coordination on that path (I.e. the path is LSR). Coordination of expectations is shown to depend on three factors: the nature of the CK initial beliefs, the degree of structural heterogeneity and the information structure. Our sufficient conditions for LSR precisely reflect these features and provide basic consistent justifications for the choice of the saddle path solution.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2001-7
Economics
Rationality
Coordination on saddle path solutions: the eductive viewpoint
Working Paper

Evans, George W., 1949-
Guesnerie, R.
2003-12-15T19:29:59Z
2003-12-15T19:29:59Z
2003-10-10
http://hdl.handle.net/1794/131
We examine local strong rationality (LSR) in multivariate models with both forward-looking expectations and predetermined variables. Given hypothetical common knowledge restrictions that the dynamics will be close to those of a specified minimal state variable solution, we obtain eductive stability conditions for the solution to be LSR. In the saddlepoint stable case the saddle-path solution is LSR provided the model is structurally homogeneous across agents. However, the eductive stability conditions are strictly more demanding when heterogeneity is present, as can be expected in multisectoral models. Heterogeneity is thus a potentially important source of instability even in the saddlepoint stable case.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers;2003-28
Mathematical and quantitative methods
Mathematical methods and programming
Game theory and bargaining theory
Noncooperative games
Existence and stability conditions of equilibrium
Coordination on Saddle-Path Solutions: The Eductive Viewpoint -- Linear Multivariate Models
Working Paper

Ellis, Christopher J.
Fender, John
2003-08-20T16:35:24Z
2003-08-20T16:35:24Z
2003-06-10
http://hdl.handle.net/1794/115
We develop a Ramsey type model of economic growth in which the "Engine of Growth" is public capital accumulation. Public capital is a public good, and is financed by taxes on private output. The government may either use the taxes gathered to fund public capital accumulation or consume the resourses itself; that is engage in corruption. There is an irreducable level of endogenously determined corruption which constitutes rents for which potential governments compete. This competition takes the form of choosing a time path for public capital invesment, which implies time paths for output and household consumption. We study both the model’s steady state, and dynamical behavior along the saddle path. The predictions of our theory accord well with the existant empirical evidence on the relationships between the level and growth rate of output, corruption, public investment and fiscal transparency. Our analysis also does a good job of explaining the transition experiences of several Eastern European economies.
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University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2003-13
Public capital
Growth
Corruption
Economics
Corruption and Transparency in a Growth Model
Working Paper

Ellis, Christopher J.
Dincer, Oguzhan C., 1969-
2005-03-22T22:28:07Z
2005-03-22T22:28:07Z
2005-03-01
http://hdl.handle.net/1794/656
16 p.
Several empirical studies have found a negative relationship between corruption and the decentralization of the powers to tax and spend. In this paper we explain this phenomenon using a model of Yardstick Competition. Further, using data on government corruption in US states, we provide some new evidence that supports the theoretical findings.
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers ; 2005-5
Corruption
Decentralization
Yardstick competition
Corruption, Decentralization and Yardstick Competition
Working Paper

Chakraborty, Shankha
Lahiri, Amartya
2003-08-18T20:42:52Z
2003-08-18T20:42:52Z
2003-01-01
http://hdl.handle.net/1794/104
Distortions in private investment due to credit frictions, and in public investment due to corruption and bureaucratic inefficiencies, have both been suggested as important factors in accounting for the cross-country per capita income distribution. We introduce two modifications to the standard one-sector neoclassical growth model to incorporate these distortions. The model is calibrated using data from 79 countries to examine the quantitative implication of these margins. We find that financial frictions account for less than 2% of the cross-country variation in relative income. Even accounting for mismeasurement, financial frictions can typically explain less than 5% of the income gap between the five richest and the five poorest countries in the world. Distortions in the public investment process, on the other hand, seem more promising. There is both more variation in the measured value of the public capital distortion and it can account for more than 25% of the income gap between the richest and poorest countries in our sample.
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en_US
University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2003-1
Relative income
Agency costs
Credit frictions
Public capital
Microeconomics
Macroeconomics
Economic development
Information and uncertainty
Costly Intermediation and the Poverty of Nations
Working Paper

Magud, Nicolas(University of Oregon, Dept of Economics, September 1, 2004)

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Magud, Nicolas
2004-10-15T13:54:18Z
2004-10-15T13:54:18Z
2004-09-01
http://hdl.handle.net/1794/232
41 p.
The paper analyzes the choice of an exchange rate regime for a small open economy indebted in foreign currency, incorporating the ¯nancial accelerator. Conventional wisdom suggests that floating regimes should insulate the economy from real shocks. I show that this result depends on the degrees of openness of the economy and foreign currency indebtedness and, in fact, does not hold for relatively closed economies. The transmission mechanism relies on nonlinearities in the impact of unanticipated real price changes on the external finance premium, in the spirit Fisher (1933).
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en_US
University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers;2004-14
Currency mismatch
Liability dollarization
Balance sheets
Exchange rate regimes
Openness
Nominal rigidities
Currency Mismatch, Openness and Exchange Rate Regime Choice
Working Paper

Fender, John
Ellis, Christopher J.
2009-01-09T17:24:52Z
2009-01-09T17:24:52Z
2008-04-01
http://hdl.handle.net/1794/8265
24 p.
In this paper we combine Acemoglu's model of the economic origins of democracy with
Lohmann's model of political mass protest. This alllows us to provide an analysis of the
economic causes of political regime change based on the microfoundations of rebellion. We
are able to derive conditons under which democracy arises peacefully, when it occurs only
after a violent rebellion, and when oligarchy persists. We model these posibilities in a world
of asymmetric information where information cascades are possible, and where these cascades
may involve errors in a paratian sense.
en_US
University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers;2008-2
Rebellion
Information cascades
Democracy
Democratic Errors
Working Paper

Harbaugh, William
Nouweland, Anne van den
2003-08-14T21:16:30Z
2003-08-14T21:16:30Z
2002-06-14
http://hdl.handle.net/1794/88
Determining the productivity of individual workers engaged in team production is difficult. Monitoring expenses may be high, or the observable output of the entire team may be some single product. One way to collect information about individual productivity is to observe how total output changes when the composition of the team changes. While some employers may explicitly shift workers from team to team for exactly this reason, the most common reasons for changes in team composition are at least partly voluntary: vacation time and sick days. In this paper, we develop a model of optimal absenteeism by employees which accounts for strategic interactions between employees. We assume the employer uses both observed changes in output and the strategies of the employees to form beliefs about a given worker’s type. We argue that the model we develop is applicable to a variety of workplace situations where signaling models are not, because it allows a worker’s decisions to provide information about
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en_US
University of Oregon, Dept. of Economics
University of Oregon Economics Department Working Papers;2002-6
Absenteeism
Noncooperative games
Signaling
Teamwork
Labor productivity
Productivity accounting
Demonstrating worker quality through strategic absenteeism
Working Paper